Some solar firms oppose net metering changes

Changes to solar net metering adopted Tuesday by state utility regulators have the approval of many in the power industry, but there is a division in the rooftop-solar industry — some firms fear the new rules will reduce business while others support the change.

The regulators voted 4-1 to end the system solar net metering, where solar households get full retail credits for the kilowatt-hours of electricity they don’t use at home and send to the power grid. Instead, they will get something less than the retail price of electricity. Their payments will be set by complex calculations based on what the electricity would be worth if it came from traditional power plants and what it actually saves the utility.

Representatives from the solar industry estimate that when the changes take effect next year, they will result in about a 30 percent drop in the savings solar customers see on their utility bills when they install panels, but other experts said that estimate is high.

“It is not a shock to us and will not be a shock to the solar customers we serve in the future,” said Sean Seitz, owner of American Solar Electric and president of the Arizona Solar Deployment Alliance, a local trade group comprising four large in-state installation companies.

The other ASDA members are Arizona Solar Concepts, Harmon Solar and Sun Valley Solar Solutions.

Will this force solar industry to restructure?

ASDA, which collectively represents about 350 workers in Arizona, had no complaints about the changes. The attorney for the group praised the collaborative nature of the decision, which was amended multiple times to appease the various parties to the case.

Seitz said Commissioner Robert Burns was particularly helpful to the solar industry with his suggested amendments. Burns, however, opposed the final measure, as he had pushed for higher compensation for solar.

Key to the decision is that those who already have solar will remain on solar net metering for 20 years from their interconnection date, a concept called “grandfathering.” That means only those who install solar in the future will be subject to the new rules.

Officials from utilities such the state’s largest, Arizona Public Service Co., also largely supported the decision, as did officials from the state consumer advocate, the Residential Utility Consumer Office, which saw many of its proposals adopted in the final decision.

But the Alliance for Solar Choice, a trade group that represents large national installers such as leasing company Sunrun Inc., was disappointed in the decision. The group’s lawyer, Court Rich, along with Sunrun representatives and officials from the non-profit Vote Solar, wanted more compensation for solar power sent to the grid.

“TASC is deeply disappointed that the Arizona Corporation Commission disregarded the full, long-term value that rooftop solar brings to Arizona and the long-term certainty that Arizonans need when contemplating a solar investment,” the group said in a statement after the vote.

And some Arizona installers feared the cuts will hurt business.

“This will cause the solar industry to restructure,” Brandon Cheshire, owner of SunHarvest Solar, said on Twitter after the vote. “Smaller integrators won’t survive until storage is more viable.”

‘A step in the right direction’

The Corporation Commission changes are significantly more nuanced than those approved by the state’s second-largest utility, Salt River Project, in 2015. The public utility, which is not regulated by the Corporation Commission, requires solar customers to go on a “demand rate” that bases a large portion of their bill on the highest use of electricity during the month. Demand charges can negate the savings solar panels bring utility customers.

Solar installations nearly ceased in SRP territory after the decision and remain far below what they were when the company offered net metering without the demand rate.

“We’ve all been focused on this since SRP changed their rate structure almost two years ago,” Seitz said of the ASDA members. “We are all on a path to create sustainability within our companies.”

He said his company only recently has begun to work in SRP territory under new programs aimed at advanced technology such as inverters, load controllers and eventually batteries that make solar work more in alignment with the demand on the power grid.

Utilities have been trying for years to amend net metering because they contend the system overpays solar customers and forces non-solar customers to pay more than their fair share for electric service.

APS supported the Tuesday vote but said in a statement the changes don’t fully address the “cost shift” from solar to non-solar customers.

“While today’s action was a step in the right direction, subsidies and a cost shift still exist,” the APS statement said.

Commissioners who approved the measure took comfort that they balanced the wishes of multiple parties in the case.

“Today this commission made sure all ratepayers will be treated fairly,” Commissioner Bob Stump said before voting Tuesday.